Question to Joe Lowry at recent Fastmarketsconference.How does...

Question to Joe Lowry at recent Fastmarkets
conference.

How does Lepidolite producers survive with this
price level if they were suppose to have costs much
higher than current prices?

”It doesn’t matter. It doesn’t matter what the cost is
because of vertical integration in China. The two big
battery producers have every reason to run lepidolite
at a loss to keep the price down. You want to keep
the couple hundred thousand tons in the market,
even if your taking a small beating, because the
small beating your taking on the lithium side is much
more made up for in the fact that the rest of the
lithium your buying stays at a lower price!

Because the markets not jumping!

That’s the big argument now, go back to the cost
curve, China does not follow the western playbook.
So it makes perfect sense for a CATL and a BYD
to run part of that integrated supply chain at two,
three or even four thousand dollar a ton loss. When
that investment is DAMPENING investment
everywhere else in the world.

Now what that’s doing is setting up the next big
bubble of course because that swing capacity has
limitations. But that’s a couple years down the road
and they’ll deal with it then.

But they caused the problem in the first place with
the spike, and what your seeing is the solution.”

IMO why growth is so vital. Any number of
scenarios couple play out that good old China
may not be able to account for. And everyone
mentions them verbatim - ESS demand, slower
supply coming on than expected etc etc

And we are situated better than anyone IMO.